Sidecar Puts It in Park Despite Hot Mobility Sector

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Yesterday, news came across the transom that San Francisco ride-sharing service Sidecar would shutter its operation, effective tomorrow. The news wasn’t a complete shock—though Sidecar launched at roughly the same time as Uber and Lyft, it failed to inspire the billion-dollar valuations, user adoption rates, and investor backing that those two peer-to-peer ride-sharing startups did. It also operated in a comparatively small number of markets.

Still, Sidecar was respected and adored by its users. It had recently begun offering a “last mile” delivery service that seemed to be going well, becoming the “top business-to-business delivery service in the country in a matter of months,” according to a farewell post on Medium written by Sidecar co-founder Sunil Paul.

You may not know that Sidecar also has a Michigan connection. Adrian Fortino, who runs the Mercury Fund‘s Michigan operation and is an active mentor to many local startups, is also a Sidecar co-founder. The serial entrepreneur and investor stepped back from the company’s daily operations some time ago, but he is thought to still have a stake in the company. Reached over e-mail last night, he declined to comment on the announcement.

So we looked to a couple of other Detroiters involved in the mobility startup scene for their thoughts. Ted Serbinski, who leads the Techstars Mobility incubator at Ford Field, said he was “a little surprised” by the news. Serbinski theorized that Sidecar ultimately fell to its biggest competitor: the status quo.

“Uber and Lyft overcame the status quo through expensive marketing efforts,” he said. “I don’t know that Sidecar was ever able to get that same brand recognition. Uber was also very aggressive about growing and replicating the playbook in as many cities as possible. That requires a lot of cash to be able to catapult into a city.”

Serbinski said that a lot of logistics/delivery and ride-sharing startups applied to be part of the first Techstars Mobility cohort, which was held over the summer. After the second round of applications opens on Jan. 5, he imagines he’ll see even more.

Since it is such a growing sector, Serbinski said this doesn’t necessarily have to be the end of the road for Sidecar. In his Medium post, Paul also said as much, writing that he was excited to see what was next—though that’s often standard farewell letter boilerplate. “Great investors and a smart executive team could go in a number of directions, probably in more of a business-to-business direction,” Serbinski said.

Anya Babbitt, CEO of the Techstars Mobility graduate SPLT, also had the Sidecar announcement on her mind, especially since Fortino is one of her company’s mentors. SPLT is an enterprise ride-sharing company that seeks to connect commuters and other riders traveling similar routes.

When she looks at the Sidecar situation, it strikes her that Sunil Paul, when compared to Uber’s Travis Kalanick and Lyft’s Logan Green and John Zimmer, was “too timid … his moves were not really bold enough for the new mobility space.”

Kalanick, on the other hand, is someone she sees as “gritty” enough to “be the better bet” when it comes to stepping on the toes of taxi companies and city regulators, institutions seen by ride-sharing fans as being mired in status quo and bureaucracy. Zimmer and Green, she feels, are youthful thinkers with the visionary qualities needed for massive scaling.

“In ride-sharing, all the major players are fighting to the death,” Babbitt said in an e-mail exchange. “Just look at Didi Kuaidi’s investment in Lyft after Uber went to China. Sidecar’s exit from e-hailing will make it more difficult for up-and-coming players in the rideshare space to raise money and gain a substantial market share. New players such as SPLT survive by offering key differentiators and moving beyond just one model.”

Despite Sidecar’s exit from the ride-sharing landscape, mobility startups, it seems, will continue to help drive the future of transportation.

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA